by Bill McBride on 4/10/2013 12:29:00 PM
Wednesday, April 10, 2013
Several years ago I started following the Sacramento market to look for changes in the mix of houses sold (conventional, REOs, and short sales). For some time, not much changed. But over the last 2 years we've seen some significant changes with a dramatic shift from foreclosures (REO: lender Real Estate Owned) to short sales, and the percentage of total distressed sales declining sharply.
This data suggests healing in the Sacramento market. Other distressed markets are showing similar improvement.
Note: The Sacramento Association of REALTORS® started breaking out REOs in May 2008, and short sales in June 2009.
In March 2013, 37.5% of all resales (single family homes and condos) were distressed sales. This was down from 43.8% last month, and down from 59.6% in March 2012. This is the lowest percentage of distressed sales - and therefore the highest percentage of conventional sales - since the association started tracking the data.
The percentage of REOs decreased to 10.5%, and the percentage of short sales decreased to 27.0%.
Here are the statistics.
Click on graph for larger image.
This graph shows the percent of REO sales, short sales and conventional sales.
There has been a sharp increase in conventional sales recently, and there were almost three times as many short sales as REO sales in March.
Active Listing Inventory for single family homes declined 37.8% from last March. Cash buyers accounted for 36.4% of all sales (frequently investors), and median prices were up 30% year-over-year (the mix has changed). UPDATE: I recommend using the repeat sales indexes for prices as opposed to the median price calculated by the local MLS.
Total sales were down 17% from March 2012, but conventional sales were up 29% compared to the same month last year. This is exactly what we expect to see in an improving distressed market - flat or even declining overall sales as distressed sales decline, and conventional sales increase.
We are seeing a similar pattern in other distressed areas, with a move to more conventional sales, and a shift from REO to short sales. This is a sign of a recovering housing market.